Microsoft just had a flashback nobody wanted. The company’s shares are careening toward their worst monthly decline since December 2000, the kind of drop that makes portfolio managers check their screens twice and then quietly close their laptops.
The stock has fallen approximately 21.6% in June 2026, dragging it to one-year lows near $349 to $353. Year-to-date losses now sit around 24-25%. For a company that spent the better part of three years as the poster child for the AI revolution, that is a remarkable reversal of fortune.
The AI paradox eating Microsoft’s stock
Here’s the thing about Microsoft’s situation: the business is actually growing. The company’s AI segment has reached a $37 billion annualized run rate, which represents a 123% year-over-year increase. More than 80% of Fortune 500 companies now use Microsoft’s AI services. By any traditional measure, these are the kind of numbers that should have investors popping champagne.
The culprit is capital expenditure, the massive upfront spending required to build AI infrastructure at scale. Think data centers, specialized chips, cooling systems, and the sheer electricity needed to keep it all humming. Microsoft has been writing checks at a pace that is making Wall Street deeply uncomfortable.
